Messy, messy, messy: Can’t even close a proper deal with the unions. GM and the unions have an agreement. It is basically as reported this morning. The deal has the signatures of management and unions. One signature is missing, reports Die Welt: That of Bochum works council chief Rainer Einenkel.

With the missing signature, there are doubts whether the deal is legally binding. Says Die Welt: “The courts may have to decide.”

Both GM and the metal worker union IG Metall are interested in bringing the matter behind them. Steve Girsky needs to report mission accomplished to Detroit (even if the result is dubious). The metal worker union already has its eyes on a much bigger prize: The new round of collective bargaining.

The unions want a raise for all 3.7 million German metalworkers, and the chances are good. Volkswagen reported record earnings, BMW and Daimler also have solid profits. The unions want 5.5 percent more this year. They would have bargained for more, would Ford and Opel not be in the poorhouse in Europe. GM wants to pay its workers zero percent more, “but the Americans don’t know the German system well enough,” Opel-union boss Schäfer-Klug told Focus. “Germany has a collective bargaining system, and Opel can’t undermine it. Neither IG Metall nor the other automakers will accept that.”

That's the history when labor is given industry-wide monopoly power. See the UAW and British labor unions.
Japan has a better systen with company specific unions – w/o them, weak companies like Mazda would probably not exist. If the USA had had them Studebaker et al might exist today.

“For every Volt GM sells, Obama delivers $1 million in unmarked bills to Detroit which is then taken across the Atlantic to Europe and delivered to Susan Docherty who passes it on to the union workers.”

Your sarcasm is lost on the irony. GM is forgiven of $20 billion it owes to Uncle Sam, most of which will find its way into Europe to fund Opel’s losses. That comes to $1 million for every Volt sold in 2012.

Also, look at how much money Ford and GM moved out of Australia several years ago to support the inefficient NA and European operations.

Then Ford and GM go to our government crying poor.

As for the Euro unions, they have to much power. This has been enacted by the governments.

Sergio in Italy is fighting to relax work place relations. The Europeans will change, they have to, just like the US. Hollande in France, can’t work effectively with business, the unions have to much control.

All workers in the US and Euro zone have to reduce their standards of living. This is inevitable, or they will grow “even broker”.

Ford and GM are where they are because of poor management, by governments, unions, manufacturers etc.

If the “current” (for not much longer) government sensed the people would except massive government spending by the population they would have us in a mess right now.

I think it is the Australian public who have pressured the them into being more responsible. It could have been much worse (and better).

I don’t believe in subsidised industry. Don’t get me wrong a one off assistance package is okay. But long term trade barriers and handouts kill and make any industry uncompetitive. All you have to do is look at the US/Euro/Japanese economies.

We have been lucky, we just go out to our backyard and fill some more dirt in a wheelbarrow and sell it. Without that who knows?

“All workers in the US and Euro zone have to reduce their standards of living. This is inevitable, or they will grow ‘even broker.”

I do not think Australian, European and US workers will be able to afford to buy more cars if we carry on reducing their salaries. Somehow, I don’t think the ever richer rich will buy up the slack. They will rather tend to sack the workers that are no longer needed, because of lower car sales.

@OAlx
The problem is most of the OECD economies have to make room for the up and coming developing economies.

A similar problem has occurred in the past when the US became an industrial powerhouse after the Civil War.

The Europeans refused to accept the strength and influence of the US. The Europeans finally accepted the influence of the US after WWII. We are doing the same now. Look at how many comments deflect the growth of China and the influence it will have. People fear, they just don’t want to believe that the Chinese can be more influential than the Euro, US or even the Japan.

The Chinese and Japanese are already playing “games” in the South China Sea over some rocks. The Chinese will use there influence more and more globally, look at Africa the Chinese have made big inroads there. But the West have never paid much attention ot Africa, so the Chinese are moving in.

The OECD countries wanted to have more global trade and development, but it appears they didn’t take into account the impact on the cost of resources.

The end result is more global trade (money), but someone has to have a little less so someone can have more.

What is this Ford is dying thing, don’t recall them going bankrupt, they’re in a lot better shape then PSA, Fiat or Opel (i.e. over the last ten years they are positive in EU and they actually have the money to address overcapcity issues now, while making it that much harder for the other three to do the same, its called a “long term strategy”, same thing they did with the UAW to push GM and Chryco over the edge just as the task force was hoping that maybe BK could be avoided). Sure VW is #1 and always probably will be (though Opel once had 40% marketshare), but being number #2 sure didn’t hurt ford in the US.

“Always look at the bright side of life”, especially, if living in the US! Should there be a free-trade agreement between the US and the EU you will be able to drown Europe with cheap cars from the Americas. No GM or Ford production facilities needed in Europe anymore. European Greens will be delighted. How’s that?

@Big Al from Oz–I was originally for the government loans for GM & Chrysler but this is not a sustainable business model. GM cannot really afford this and there is a limit to how much taxpayers can afford. I originally thought that GM keeping Opel was good but GM needs to get rid of Opel by either finding a buyer which I doubt they can, or closing Opel like they have with Saab, Pontiac, Saturn, Hummer, Oldsmobile. It would be better for GM to cut their loses on this and just import Daewos. Opels are good cars but when you are struggling to stay in business you cannot afford any pay raises. Pay scales have been going down or are frozen for many American workers and it should be frozen for auto workers and management including top officers until the economy gets better and the company becomes self sustaining. I agree Al this is not a sustainable model even for Ford whose North American operations have been carrying its European operations. Government loans and government subsidies are not sustainable.

Hi Jeff S
I agree the European operations at the moment are a big drag on GM. The problem from what I’ve heard is some European governments dictate if they can close shop or how many plants are going to close. So it appears GM has made some poor decisions when dealing with governments external to the US.

How much did GM lose with PSA? I think the your analysis of NA manufacturers business models is correct. It wouldn’t surprise me to find one day that Fiat/Chrysler will be the largest NA producer.

One thing that isn’t mentioned much on the vehicle forum’s is the amount of money government spend subsidising these companies with defence contracts. GM, Ford just don’t build vehicles, they are also involved in aerospace and military technologies.

It’s a very complicated mess. I just hope you guys in the US can hold it all together.

@Big Al from Oz–I am not trying to be a yes man, but you have said this on PUTC for a couple of years and have gotten flack for this. You are correct and the auto industry as it is, is not a sustainable model. This is a repeat of the British auto industry and the Swedish auto industy from the 70s and 80s except this is on a much larger scale. If you remember British industries in the 70s, such as British Leyland went through this and were taken over by the government. The same with Volvo and Saab in Sweden. When Margaret Thacther became Prime Minister of GB the government started to privitize the industry. Now Britian to my best knowledge does not own any of their auto industry. Tata owns Jaguar and Land Rover, BMW owns Rolls Royce and the Mini Cooper, VW owns Bentley, a Chinese company owns the rights to make the Rover. Not too long ago Ford owned Jaguar, Land Rover, Volvo,and Aston Martin but sold them off to get needed revenue and concentrate on their NA operations. Now Geely owns Volvo.

Shared products and platforms are necessary to reduce costs. Also containing labor costs and management salaries. Corporate executives should not receive such large salaries and they should not get bonuses when the company is doing poorly. I agree Al that Fiat might end up one of the major players in the NA market with the acquisition of Chrysler. So far Chrysler has been making all the right moves which in the past it was the opposite. I can see a possible merger of GM with Ford if GM continues to dig a deeper hole. This could be where the government forces a merger with Ford playing a similiar role to Fiat. On the otherhand it could be a non US corporation takes GM over or even the Chinese. GM at the very least needs to either unload or close the Opel operations.

Volvo and Saab were purchased and ruined by US companies. They were original and quirky enough they could have probably survived on their own quite nicely. Well, Volvo at least. GM turned Saab into a name on a badge. BL had no innovation.

@Big Al from Oz–Yes. Just like all GM autos 40 years ago had “Body by Fisher” on the bottom of the door frame. GM needs a car person to lead them similiar to an Iaccoca. I don’t have any problems with GM using Opel and Holden platforms, they are proven platforms, but the problem is keeping an operation like Opel that is bleeding cash when GM has been given government loans from America, Australia, and other countries just to survive. Opel needs to be jettisoned from GM and GM needs to get an experienced car person to lead them otherwise they will be on death watch. GM’s new products are much better but they need to be run better and put their emphasis on quality and not on flooding the market with their products in order to become number 1. I am not anti GM. I currently own a GM products and have owned a Buick and several Chevys. I would just like to see GM just get their act together and be operated like a profitable corporation with an eye to the consumer and quality.